Blockchain-based system and method for peer-to-peer online advertising auction

Abstract

Method for online advertising auction on a peer-to-peer network includes: deploying a smart contract to publish a need from a consumer; receiving encrypted ad bids by the smart contract; storing the received ad bids in a hash function; reducing a number of ads that can be displayed by the consumer; transmitting the ad price to the consumer via the peer-to-peer computer network, when the hashed verification code is received from the consumer verifying that the consumer has viewed the ad content within an ad-viewing period of time; transmitting a difference between the advance payment and the ad price to the advertiser, by the smart contract via the peer-to-peer network; and ending the online advertising auction.

What is claimed is: 
     
       1. A computer implemented method for a uniform price auction of online advertising on a peer-to-peer computer network which determines an ad price to be paid to a consumer for watching an ad based on encrypted bid prices, the method comprising:
 deploying an auction smart contract to publish a need from a consumer; 
 receiving ad bids for an ad by the smart contract, from a plurality of advertisers; 
 storing the received ad bids in a hash function mapped to the advertiser's address, wherein the stored ad bid includes a hash of a content of the ad encrypted with the consumer's public key, a hashed encrypted binary representation of a bid price, a public key of the advertiser, and a hashed verification code, wherein the bid price is a maximum amount the advertiser is willing to pay the consumer for viewing the content of the ad; 
 receiving an advance payment equal to a predetermined maximum ad price to guarantee payment, when the consumer has viewed the ad; 
 setting the ad price to a predetermined default value when the number of ad bids received is below a predetermined number; 
 when the number of ad bids received is not below a predetermined number, reducing the number of ads that can be displayed by the consumer by increasing the ad price and eliminating ads with bid prices lower than the ad price and iteratively varying the ad price until the number of ads with bid prices higher than the ad price is between a predetermined minimum and maximum via a secure multiparty protocol between an auction oracle and advertiser oracles using a secure communication channel smart contract; 
 detecting inconsistent behavior of advertiser oracles during the secure multiparty protocol and disqualifying dishonest advertisers; 
 transmitting the ad price as the payment to the consumer via the peer-to-peer computer network, when the hashed verification code is received from the consumer verifying that the consumer has viewed the content of the ad within an ad-viewing period of time; 
 transmitting a difference between the advance payment and the ad price to an advertiser whose ad was viewed, by the auction smart contract via the peer-to-peer computer network; 
 transmitting the advance payment to advertisers whose ad was not viewed, by the auction smart contract via the peer-to-peer computer network; 
 transmitting the advance payment of disqualified advertisers to the consumer by the auction smart contract via the peer-to-peer computer network; and 
 ending the uniform price auction of online advertising. 
 
     
     
       2. The method of  claim 1 , further comprising mapping the received ad bid to an address of an advertiser sending the ad bid. 
     
     
       3. The method of  claim 1 , further comprising storing the auction smart contract at all nodes of the peer-to-peer computer network; executing a function of a smart contract by all nodes of the peer-to-peer computer network; and storing all transactions in a blockchain. 
     
     
       4. The method of  claim 1 , wherein advertisers submit the ad bids during a bidding period, and further comprising storing a plurality of states in the auction smart contract to indicate a current state, wherein the plurality of auction states includes a “Bidding”, an “Auction”, an “Ad-viewing” and a “Closed” state. 
     
     
       5. The method of  claim 4 , wherein the auction smart contract includes a state-change function for checking whether the state of the smart contract needs to be changed. 
     
     
       6. The method of  claim 4 , wherein when an auction state check is in an “Ad-viewing” state and a current date is larger than an end of the ad-viewing period, the smart contract changes the state to a “Closed” state, in which a reclaim of unused advance payment by the advertiser and a claim of advance payment of disqualified ad bids by the consumer is possible. 
     
     
       7. The method of  claim 1 , further comprising:
 deploying a secure communication channel by the auction smart contract between the auction oracle and the advertiser oracles, when the auction state is in an “Auction” state; 
 the auction oracle setting a new ad price and together with advertiser oracles comparing the new ad price to the bid prices to determine a number of ad bids with equal or higher bid prices; 
 ending the auction, when the number of ad bids with equal or higher bid prices is between a predetermined minimum and maximum number; and 
 setting a different ad price and repeating setting a new ad price until an ad price with a number of ad bids with an equal or higher ad price between a predetermined minimum and maximum number is determined. 
 
     
     
       8. The method of  claim 1 , further comprising:
 encrypting the bid price by creating a vector of Paillier encrypted 0s and 1s of length (0, . . . , maximum ad price) and setting elements (0 to bid price) to encrypted 1s and elements (bid price+1 to maximum ad price) to encrypted 0s; 
 storing the vector in a content-addressable peer-to-peer storage network; and 
 transmitting a hash value returned as a key to the auction smart contract as the bid price component of the ad bid. 
 
     
     
       9. The method of  claim 1 , wherein the ad bid includes the following status:
 an Open status, where open ad bids are allowed be viewed during the ad-viewing period; 
 an Outbid status, where the bid price of the ad bid is below the ad price; 
 a Disqualified status, where the advertiser of the bid did not follow the auction protocol correctly; 
 a Penalized status, where the consumer has claimed an advance payment of the disqualified bid; and 
 an Advance Payment returned status, where the respective advertiser has reclaimed the advance payment.